Assessment order set aside due to procedural irregularities despite petitioner's failure to monitor GST portal under Sections 73 and 74

The Madras HC set aside an assessment order dated 29.07.2023 due to procedural irregularities, despite finding that the petitioner failed to monitor the GST portal as required. The court noted discrepancies between the show cause notice issued under Section 73 and the impugned order referencing both Sections 73 and 74. While notices were uploaded on the GST portal's View Additional Notices and Orders tab, they weren't communicated through other modes. The matter was remanded for reconsideration with the condition that petitioner deposit 10% of disputed tax demand within two weeks. The writ petition was disposed of accordingly.

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Issues involved: Challenge to assessment order on grounds of breach of principles of natural justice.

The petitioner challenged an assessment order dated 29.07.2023, alleging lack of awareness of the proceedings leading to the order as the intimation, notice, and order were only uploaded on the GST portal without any other communication. The petitioner filed a writ petition based on these circumstances.

The petitioner contended that the show cause notice was issued under Section 73 of GST enactments, which specifies a 100% penalty, whereas the impugned order referred to both Sections 73 & 74. The petitioner agreed to remit 10% of the disputed tax demand as a condition for remand.

The respondent, represented by Mr. C. Harsha Raj, argued that the petitioner had sufficient opportunities to contest the tax demand, with intimation in February 2023, a show cause notice on 26.02.2023, and three reminders thereafter. The respondent maintained that the amounts were correctly mentioned in the show cause notice.

Upon comparison of the show cause notice and the impugned order, it was noted that the show cause notice was issued under Section 73, despite mentioning a 100% penalty. The impugned order referred to Section 73 in the summary but also made reference to Section 74 in the detailed order. The court observed that the petitioner, as a registered person, had an obligation to monitor the GST portal regularly, which was not done. However, due to these discrepancies, the impugned order was set aside, and the matter was remanded for reconsideration with the condition that the petitioner remits 10% of the disputed tax demand within two weeks.

The court directed the petitioner to submit a reply to the show cause notice within the specified period. Upon receiving the reply and being satisfied with the 10% remittance, the respondent was instructed to provide a reasonable opportunity to the petitioner, including a personal hearing, and issue a fresh order within three months. All contentions were left open for the petitioner during the remanded proceedings.

The writ petition was disposed of without any order as to costs, and connected miscellaneous petitions were closed.

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